Correlation Between Vince Holding and Culp
Can any of the company-specific risk be diversified away by investing in both Vince Holding and Culp at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Vince Holding and Culp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vince Holding Corp and Culp Inc, you can compare the effects of market volatilities on Vince Holding and Culp and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Vince Holding with a short position of Culp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vince Holding and Culp.
Diversification Opportunities for Vince Holding and Culp
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vince and Culp is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Vince Holding Corp and Culp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Culp Inc and Vince Holding is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Vince Holding Corp are associated (or correlated) with Culp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Culp Inc has no effect on the direction of Vince Holding i.e., Vince Holding and Culp go up and down completely randomly.
Pair Corralation between Vince Holding and Culp
Given the investment horizon of 90 days Vince Holding Corp is expected to under-perform the Culp. In addition to that, Vince Holding is 2.18 times more volatile than Culp Inc. It trades about -0.09 of its total potential returns per unit of risk. Culp Inc is currently generating about -0.18 per unit of volatility. If you would invest 553.00 in Culp Inc on August 27, 2024 and sell it today you would lose (34.00) from holding Culp Inc or give up 6.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vince Holding Corp vs. Culp Inc
Performance |
| Timeline |
| Vince Holding Corp |
| Culp Inc |
Vince Holding and Culp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vince Holding and Culp
The main advantage of trading using opposite Vince Holding and Culp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vince Holding position performs unexpectedly, Culp can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Culp will offset losses from the drop in Culp's long position.| Vince Holding vs. Ermenegildo Zegna NV | Vince Holding vs. Columbia Sportswear | Vince Holding vs. Gildan Activewear | Vince Holding vs. G III Apparel Group |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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